GST 2.0 rolls out today, Modi hails ₹2.5L-cr 'savings festival'

Indians will save ₹2.5 lakh crore on account of the GST rate changes effective from Monday and income tax changes announced earlier this year, Prime Minister Narendra Modi said in an address to the nation Sunday evening.

- Smriti Kak Ramachandran

Terming it a "savings festival" he pointed out that while the income tax changes benefited the middle class, the GST cuts also benefit the poor and the neo middle class.

"People will now be able to save more and buy what they like. With these reforms the youth, farmers, women, shopkeepers, traders, entrepreneurs will all be able to benefit from this Bachat Utsav (savings festival). Everyone will have something to feel happy about in this festive season," Modi said.

The PM also referred to low inflation—retail inflation is around 2%—in a speech with a clear message between the lines ahead of the festive season that sees Indians spending more on everything from consumables to clothes to electronic goods to house painting: spend more.

India is hoping that the demand surge will offset some of the impact of US tariffs that have hit Indian merchandise exports.

The PM also spoke about the salutary effect of a lighter GST regime on medium and small enterprises-enhancing their competitiveness and boosting an economy that is still dominated by small businesses.

"Reduction in the GST slabs will allow the MSMEs and small traders to make profits. Their sales will go up and they will have to pay less tax. It will be a double bonanza for them as well," he said, adding that he had "a lot of expectations" from the sector.